Contents INTRODUCTION...........................................................................................................................................3 TASK 1..........................................................................................................................................................3 Key considerations for evaluating growth opportunities.........................................................................3 Ansoff Matrix...........................................................................................................................................5 TASK 2..........................................................................................................................................................6 Potential sources of funds.......................................................................................................................6 TASK 3..........................................................................................................................................................8 Business Plan...........................................................................................................................................8 TASK 4........................................................................................................................................................10 Succession options for a business..........................................................................................................10 CONCLUSION.............................................................................................................................................12 REFERENCS................................................................................................................................................13
INTRODUCTION Planning for growth is a strategic activity which is performed by different types of business organizations so that they can make a plan to achieve higher growth rate in the future time period and can stay ahead of their various types of competitors without problems and issues. This will make sure that they are able to achieve their goals and objectives and can maximize their level of profits for achieving growth(Baschat, 2018).Planning for growth is an essential activity which should be carried out by the business organizations to plan for the future. This is needed by them so that they are able to achieve their distinct goals and objectives in the future time period. This is quite helpful for the achievement of sustainable success. This leads to attainment of a much-required strategic edge for the companies.For this report, Relove Technology Ltd. has been selected. It is a telecommunications equipment supplier in London, United Kingdom. In this assignment, detailed analysis will be made on analysis of key considerations for SMEs, various methods used by organizations to access funding. Also, specific analysis will be made on development of business plan and assessment of various ways through which a small business owner can exit the business and the implications of each option. TASK 1 Key considerations for evaluating growth opportunities There are various types of key considerations which the organizations are required to take to evaluate the growth opportunities which are available. Growth- Growth means considerable progress which a company can make in the future. It is a top priority for most of the companies. Therefore the managers of Relove Technology are also required to focus on it so that they are able to attain sustainable success in the future time period. CompetitiveAdvantage-CompetitiveAdvantagereferstotheedgewhichthe companies can obtain over their various competitors within the market through the execution of proper strategies and tactics. In this way, the managers of Relove Technology can make sure that they are able to attain a competitive advantage over the competitors if they make use of right methods. Relove Technology’s managers can make use of the following model for this purpose- Mckinsey’s 7s framework- This framework makes use of different internal elements of an organization to look at its design. It identifies that whether they are effectively aligned and allow the organization to achieve its objectives(Colantoni and et.al., 2016). It can be used by the management of Relove
Technology so that they are able to analyze the various elements of their company in the context of achieving higher growth. There are different types of elements in this framework. The detailed analysis of these elements is as follows- Strategy- It refers to the plans which are made by the organizations so that they are able to achieve their short-term and long-term goals and objectives. Relove Technology can make use of the right strategies and therefore make sure that it is able to achieve higher growth in the future time period. Structure- It means the way a particular company is organized. This is quite important as it establishes hierarchy in an organization and therefore ensures higher-level of efficiency as well as effectiveness. The managers of Relove Technology can make sure that they are able to set a right structure in the organization which will lead towards more productivity and thus the company will achieve higher growth. Systems- It refers to the way daily activities and procedures are structured by the staff to get the job done. The management of Relove Technology can make sure that they set a right system in the company which helps them in achieving higher growth rate in the future time period. Shared values- It means the core values of the organization. These are extremely important for it because the right values have to be framed to make sure that the company can achieve higher growth rate. Thus the managers of Relove Technology are required to pay attention to them. Style- It refers to the style of leadership which is adopted by the organization. This is crucial for an organization because the leaders play an important role in making sure that the company achieves a higher growth rate. The management of Relove Technology is required to make sure that they are able to use the right style of leadership. Staff- It refers to the employees of the organization and their general capabilities. The efficiency and effectiveness of the staff of the organization has to be ensured so that the goals and objectives of the firm can be achieved without problems and issues. The managers of Relove Technology can make sure that they are able to motivate the staff to perform at its best so that the growth opportunities can be used in the right manner. Skills- It refers to the actual skills and competencies which are displayed by the workers of a company. The management of Relove Technology can make sure that the skills and competencies of employees of the organization are enhanced effectively and efficiently so that the goals and objectives are achieved and the higher growth opportunities are used in the right manner by the organization without problems and issues.
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Ansoff Matrix Ansoff Matrix can be used for the purpose of strategic marketing planning and thus it can be used for the purpose of looking at various opportunities to grow the revenue for a business through developing new products or services or “tapping into” new markets(Gounaridis, Chorianopoulos and Koukoulas, 2018). It can be used by the managers of Relove Technology for identifying growth opportunities for the future time period. The different types of elements of this matrix can be analyzed as follows- Market penetration- In this strategy, the organizations can look at selling more of their existing products and services in the existing customer base(Gumel, 2019). This strategy can be highly useful for the companies to effectively increase their level of profits in the future. The management of Relove Technology can make sure that they are able to achieve their desired goals and objectives and ensure higher growth rate through this strategy. Market development- In this strategy, the companies can take the route of entering into new markets(DODDS, DIMANCHE and SADOWSKI, 2018). This strategy can be useful for the organizations to enter into profitable markets and thus maximize their earnings there. The managers of Relove Technology can make sure that they are able to enter into new markets and therefore achieve a higher growth rate in the future time period without problems and issues. Product and Development- In this strategy, the organizations are required to ensure the way they can use to develop new products and services(Carvallo and et.al., 2018). The management of Relove Technology can make sure that they are able to achieve higher growth rate in the future time period without problems and issues. Thus this will lead to higher level of efficiency as well as effectiveness. This can ensure that the firm is able to use the growth opportunities and thus achieve a strategic edge over its competitors. Diversification- In this strategy, the companies are required to make sure that they enter into new markets with new products and services, increase their sales with existing customer base as well as acquisition(Hu, 2016). The managers of Relove Technology can use this strategy effectively and efficiently by ensuring that they are able to achieve their goals and objectives without problems and issues. The use of these strategies- The Market Penetration strategy can be used by the organizations by identifying how to increase their sales within the market effectively and efficiently. If the managers of
Relove Technology want to use this strategy then a right approach is required to be adopted by them. The Market Development strategy can be used by the companies by making sure that they are able to enter into new markets without problems and issues. If the management of Relove Technology wants to adopt this strategy then a right market is required to be identified. The Product Development strategy can be used by the companies as they make sure that they bring the necessary improvements in their existing products and services. The managers of Relove Technology can make use of this strategy by bringing the necessary improvements in their various products. The Diversification strategy can be used by the organizations by making sure that they enter into an entirely new market with new products and services. The managers of Relove Technology can make sure that they can effectively use it by entering into entirely new markets with new products and services. Justification- Market Development Strategy is used to ensure that the organization can enter into new markets. Its use can be made by the firms so that they are able to expand their products and services in markets where they can see potential to enhance their profitability in an effective manner. Thus the use of this theory is recommended to the managers of Relove Technology so that they can expand into the market of Australia. The market of this country is highly suitable for it because if offers plenty of opportunities for it to be able to enhance the profits as it can provide its existing goods and services to the customers in the country. TASK 2 Potential sources of funds There are various sources of funds which an organization can use for using different types of growth opportunities(Kühn, 2018). Some of them are explained as follows- Personal financing- Personal financing is a source of finance in which the proprietor makes use of personal savings to start a business or to diversify it(Gallagher and et.al., 2016). It can be used by the managers of Relove Technology by using the savings of the company to invest in future growth opportunities. Advantages- There is no burden of payment of interest in this particular source of finance and thus this is an advantage for the companies.
There is no delay in getting the funds as the funds are own and can be used as per needs and requirements. Disadvantages- This source of finance is limited in monetary terms and cannot offer high amount of money for investment in growth opportunities. This source of finance can decrease the reserves of a company which can create problems and issues in the future time period. Bank Loan- Bank Loan can be used by the businesses to avail the various growth opportunities which are available(Lê and et.al., 2016). In this way the businesses can make sure that they get the funds and can achieve the desired goals and objectives. The managers of Relove Technology can use this source of finance to get funds to meet their varied needs and requirements. Advantages- Bank Loan provides the desired amount of finance to the businesses and thus they are quite useful for them. Bank Loan provides the flexibility of repayment in installments which can be good for the businesses. Disadvantages- There is a heavy payment of interest on the Bank Loan which can create a disadvantage for the businesses by increasing their expenses. Different banks also demand that the businesses keep collateral security with them for availing a loan.
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Issue of shares- Issue of shares refers to issuing a part of equity of the company to the investors for the money which they have invested(Li, Li and Endter-Wada, 2017). The managers of Relove Technology can make use of this source of finance to raise the funds as and when required for carrying out their various types of activities. Advantages- In this source of finance, a company can aim to get more money for the purpose of investment in growth opportunities. In this source of finance, there is no burden on the company for the payment of interest which can result in savings in expenses. Disadvantages- This source of finance can dilute the equity of the company and therefore there will be more interference in decision-making. Issue of shares involves a lot of cost and this cannot be afforded by certain companies and thus this is a disadvantage. Justification- Relove Technology should use Bank Loan for its growth strategy of market development because this will make sure that the managers are able to get more sources of funds for the purpose of growth of the company and thus this will make sure that the company is able to achieve its goals and objectives. TASK 3 Business Plan A business plan is a guide which outlines the goals of the business and roadmap of achieving them in the future time period (What Is A Business Plan? – Meaning & Components, 2019). It can be prepared by the managers of Relove Technology so that they can fulfill their goals and objectives in the future time period without issues and problems.
Scenario- Relove Technology’s managers want to expand their business in Japan with their existing products and services. For this they want to prepare a business plan which will act as their roadmap for the future time period. Business Plan- ParticularsDetails Executive SummaryThis business plan will focus on the various aspects which the company is required to oversee in order to diversify its business in Japan. MissionThe mission of Relove Technology is to provide good products and services to its clients by charging a fair price. VisionThe vision of Relove Technology is to make a name of itself in the field of supply of telecommunications equipments. Core ValuesTo provide the products at a fair price in the market. To make sure that the needs and requirements of the customers are met. To link the market together by creating a network. To make sure that the right products are supplied in the market. Goals and objectives To achieve a higher share in the market in the long-run. To maximize the level of profits in the future time period. Marketing strategyProduct- The products which Relove Technology is going to supply in the market of Japan are telecommunication equipments. It will create a network in the market. Price- The company will follow penetrative pricing strategy as it is new in the market of Japan. With this it will aim to capture the market of the country and enhance its market share. Place- The company has selected Japan for diversification. It is a country which is advanced in technology and thus offers a good opportunity to it for maximizing its level of profits. Promotion- The company will make use of traditional as well as modern techniques of promotion for targeting the clients in the market of Japan. STP frameworkSegmentation- The company will target the clients in Japan through geographical segmentation and will prepare specific strategies for them. Targeting- The company here will target the customers and clients according to their needs and requirements and will supply the required products to them. Positioning- The company will aim to position itself quickly in the market of Japan and thus will make sure that it achieves higher growth. Cash flow Particulars2021-222022-232023-242024-25 2025- 26 C/F300000600000850000 10500 00 Inflows- Cash Revenues500000600000750000800000 10000 00 Other Cash20000025000015000020000040000
Receipts0 Total700000 115000 015000001850000 24500 00 Outflows- Cash Expenses250000350000400000500000 80000 0 Other Cash Expenses150000200000250000300000 40000 0 Total400000550000650000800000 12000 00 Surplus3000006000008500001050000 12500 00 Budget Particulars Amoun t Admin Exp.100000 Business Exp.200000 Selling Exp.150000 Other Exp.100000 Total550000 StrategiesThe company is required to adopt aggressive marketing strategies to thrive in the market of Japan. The company is required to prepare a specific strategy for its competitors in the market of Japan. TASK 4 Succession options for a business Succession planning is a process in which new leaders are identified by the current management of the organization(Mobin, Li and Komaki, 2017). In this way the managers make sure that they are able to identify the right leaders for leading the company effectively. Relove Technology’s managers are required to make sure that they are able to do succession planning which will make sure that they are able to achieve their goals as well as objectives without problems and issues. The succession options which are available for a business are as follows- Designated Date Replacement- In this strategy, the businesses are required to look forward towards replacing their leaders at a specific date(Rudolf, Kienast and Hersperger, 2018). Thus for this purpose a particular date is set when the leaders would be replaced with a new set of leaders. In Relove Technology, the management can identify various talented employees which will ensure that the company is able to get the right people to run its management effectively.
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Benefits- The use of this strategy makes sure that the businesses are able to get new leaders in due course of time. The use of this strategy makes the designated leaders mentally prepared to take on the challenging role of leadership. Drawbacks- This strategy is not useful when the leadership requires immediate replacement. This strategy involves a lot of expenditure on the part of the company. Target Date Replacement- In this method, there is a target date which is fixed by the businesses to replace the current set of leaders(Suomalainen and Xu, 2016). The managers of Relove Technology can make use of this method to replace their leaders when the time comes. Benefits- The use of this method allows the businesses to train the talented employees to take on the leadership role when the time comes. The use of this method allows the businesses to change the dynamics according to the leadership change. Drawbacks- This method does not facilitate immediate replacement if required. There is a lot of expenditure which is involved on the training. External sources- External sources can be used effectively by the leaders of the organization to find their suitable replacement(Wear, 2016). The management of Relove Technology can use this method to get talented people to assume the leadership role. Benefits- Highly-skilled candidates can be selected for the leadership role of the organization (Zheng and Lv, 2016). It saves the training cost which would otherwise be incurred by the organization.
Drawbacks- This method creates a disadvantage for talented employees within the organization who wish to assume leadership role in the future. Thenewleaderswhocomefromoutsidemayfaceproblemsinmanagingthe organization. Justification- Relove Technology’s managers are required to make use of Designated Date Replacement method for succession planning. Thus, in this way they can plan for the future time period and can identify those employees who are skillful as well as talented and can take on the leadership role whenever required. This will ensure that they are prepared to assume the leadership role when the time comes so that there is no leadership vacuum created in the organization when the time to replace the current leaders comes. Exit strategies- It refers to the strategies which can be adopted by the organizations so that they are able to exit the market(Sorensen and Sarjeant-Jenkins, 2016). The management of Relove Technology can make use of them so that they are able to identify the ways through which they can exit the market. These strategies are explained as follows- Liquidation- In it, the companies can liquidate the assets by selling them in the market through the help of a liquidator(Li, Liu and Su, 2019). Thus for Relove Technology the use of this method can be made so that they are able to exit the market. Benefits- The use of this option allows the organizations to get a good value for their assets. This will help the management of Relove Technology to get a right value by selling their assets. By making the use of this option the firms can ensure that they are able to consider the legal options. For the managers of Relove Technology it can be quite beneficial. Drawbacks- Using this method will lead to selling off of all the assets of the company. Thus in this way this creates a disadvantage for Relove Technology.
This method will lead towards redundancy of the staff of the organization. Therefore for the management of Relove Technology a disadvantage is created. Selling to another business- Here, an organization can sell off its business to another organization in the market(Jentoft, 2017). This method can be quite useful for Relove Technology to ensure that it is able to exit the market. Benefits- The use of this method can help the businesses exit by incurring lower cost. For Relove Technology, this can create an advantage. The use of this technique does not involves legal formalities like Liquidation. This creates an advantage for the management of Relove Technology. Drawbacks- By making the use of this method a firm may not be able to get a right value for their assets. For the management of Relove Technology, this can create a disadvantage. There is no certainty that an organization will be able to find a buyer for the business. For Relove Technology, this can lead towards a disadvantage. Justification- Liquidation is a method which can be used by the management of Relove Technology so that they are able to liquidate the assets and raise funds from it. In this way they will be able to exit the market. CONCLUSION From the above report, it can be concluded that planning for growth is a strategic activity which is required in every organization. This makes sure that the company is able to achieve the desired strategic advantage over the competitors in the future time period in the market. There are various key considerations for evaluating growth opportunities. Ansoff Matrix can be used for evaluation of these opportunities. There are different sources of funds available for a business. A business plan ensures that a roadmap is prepared for the businesses for the future time period. Different types of succession options are available for a business which it can use effectively and efficiently to replace its current set of leaders with new leaders when the time comes.
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